LIVE MARKETS-Time for a Great British Brexit bargain hunt?

* European shares rise, off earlier highs

* Renault (LSE: 0NQF.L - news) hit by report Ghosn to be arrested

* Banks lead sectoral gainers

Nov 19 - Welcome to the home for real-time coverage of European equity markets brought to

you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger to

share your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net

TIME FOR A GREAT BRITISH BREXIT BARGAIN HUNT? (1304 GMT)

Investors could be forgiven for considering returning to the FTSE's domestically-focused

stocks looking for a bargain after the pummelling they've received of late.

Not so fast, say JPMorgan (LSE: JPIU.L - news) equity strategists in a note published today.

They may look appealing: the bank's basket of domestic stocks chiefly comprised of banks,

homebuilders, property and retail names are trading at a median 11.9 price to earnings ratio;

they've lost 15 percent in value so far this year; they're at a 3 percent P/E discount to

historical averages (compared to exporters' 5 percent P/E premium vs historical norms); earnings

growth expectations for next year of 3 percent don't appear too demanding particularly and

they've underperformed exporters by 26 percent since the referendum.

But it's still to early to return just yet given the very large tail risks of a possible no

deal, leadership challenge and new elections, say Mislav Matejka, Prabhav Bhadani and Nitya

Saldanhain in the note.

They do expect the UK parliament to eventually agree to the deal, which would not be too

dissimilar to the one currently on the table, but May would likely need a few stabs at getting

it ratified.

In essence, things need to get significantly worse for some of the rebel MPs (BSE: MPSLTD.BO - news) to fall into

line and back the deal. That would mean investors would have to grapple with a real possibility

of significant tail risks.

And if any of them start to look more likely, the basket will sell off further, they say.

Furthermore, while typically a weaker pound tends to help UK equities, the strategists worry

that the traditional inverse correlation between the pound and stocks might break down in case

of further currency falls.

"We would look to buy the domestic stocks once the deal starts to appear secured, as then

the pound will likely be also bouncing, but not before," they say.

(Josephine Mason)

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POLICY INFLECTION POINT, EUROPE INC HAS LESS TO WORRY ABOUT (1110 GMT)

We're at an inflection point for global monetary policy with the aggregate central bank

balance sheet going to fall this quarter from the previous one as the Fed further cuts its

assets, Morgan Stanley (Xetra: 885836 - news) says, pointing out that investors are already repositioning themselves.

But there's a key distinction to make here, they say, and this time Europe Inc looks to have

a relative edge compared to Wall Street.

"U.S. net debt to EBITDA excluding financials and tech is substantially higher than in

Europe," strategists at the US bank led by Robert Griffiths say in a note.

"Going into a rising rate environment, this may not be a bad way for European corporates to

be positioned, and perhaps represents a rare relative bull point for European equities," they

add.

(Danilo Masoni)

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OPENING SNAPSHOT: SURPRISINGLY STRONG EARLY GAINS (0859 GMT)

Mining and healthcare stocks are giving European markets an unexpectedly big lift this

morning, starting the week on a more upbeat note after the gloom of last week. Still, there

aren't any signs that political drama in Brussels, Rome and London are disappearing any time

soon, so we'll see if this rally lasts.

The major bourses are up between 0.4 and 1.20 percent at 0858 GMT, with Italy the strongest

performer.

Watch Renault shares though. They've quickly gone into reverse after Japanese newspaper

Asahi reported Nissan chairman Ghosn will be arrested for alleged financial trading violations.

Shares (Berlin: DI6.BE - news) are down 5 percent at their lowest in three years and languishing at the bottom of the

CAC 40 and the STOXX 600.

(Josephine Mason)

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WHAT'S ON THE RADAR: DANSKE BANK (LSE: 0NVC.L - news) , TELECOM ITALIA (Amsterdam: TI6.AS - news) , TECHNICOLOR (LSE: 0MV8.L - news) , DIPLOMA (0750 GMT)

European shares were set to open without a convincing direction on Monday as politics

remained front and centre of investors' minds. FTSE 100 futures were down 0.3 percent as some

still expected a leadership challenge to Prime Minister May. A Eurogroup meeting later in the

day was also expected to address the building conflict with Italy’s populist government over its

budget.

With (Other OTC: WWTH - news) the earnings season pretty much over, investors focused on management changes and M&A

while navigating an uncertain political landscape.

Telecom Italia shares were seen rising 1 to 2 percent after the company appointed Luigi

Gubitosi as new CEO, in a move seen as portending a more aggressive shake-up at the group.

Shares in France’s Technicolor were seen up 10 percent, one trading desk said, after Reuters

reported citing sources that the digital media firm has been exploring options that include a

full or partial sale.

ABB (LSE: 0NX2.L - news) shares could rise after the FT reported it was in “fairly developed” talks to sell its

grids division to Hitachi.

Danske Bank shares could be under pressure after the Financial Times reported a Danske Bank

whistleblower is talking to U.S. agencies investigating alleged money laundering. Traders called

the stock down 1 to 2 percent.

Airbus and Eutelsat (Paris: FR0010221234 - news) will on Monday sign a multi-billion pound deal to build components of

two new communication satellites in Britain, business minister Greg Clark said on Sunday.

In the UK, industrial machinery firm Diploma (LSE: DPLM.L - news) 's shares could rise 2 to 3 percent after its

results beat expectations.

(Helen Reid)

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EUROPEAN FUTURES UNDERWHELMING AS CORPORATE NEWS COMES IN (0710 GMT)

Futures have opened unconvincingly this morning with the DAX and Eurostoxx 50 futures

hovering flat, CAC 40 futures barely up 0.1 percent and FTSE 100 futures down 0.2 percent.

Here are some of the headlines from the weekend and today to keep on your radar:

Airbus and Eutelsat sign UK satellite investment deal

Novartis (IOB: 0QLR.IL - news) ' blood disorder drug gets FDA approval for expanded use

Delta adds 10 A330neo in boost to Airbus' slow-selling jet

Alphabet (Xetra: ABEA.DE - news) unit halts glucose-detecting contact lens project

VW CEO says Waymo has 1-2 yr headstart in autonomous cars

UBS (LSE: 0QNR.L - news) lures more money from U.S. super rich to Switzerland

With new CEO, Telecom Italia "opera" edges towards finale

MEDIA-ABB in "fairly developed" talks to sell grids division to Hitachi - FT

Yara appoints new CFO, says no impact on earnings, strategy

Britain's Johnston Press (LSE: JPR.L - news) to transfer to bondholders

MEDIA-Danske Bank whistleblower talking to U.S. enforcement agencies- FT

Di Maio says EU election will shake up politics, help Italy

ABN Amro says cannot verify authenticity of 'rebellious managers' letter

BHP to pay $390 mln to Aus tax authorities to help settle dispute over Singapore hub

(Helen Reid)

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POLITICS TO REMAIN CENTRE STAGE IN EUROPE (0649 GMT)

The focus on politics is unlikely to shift this week with all eyes on the UK as those

opposed to Prime Minister May's draft Brexit deal may attempt to mount a leadership challenge

and the special European Council meeting of Nov 25 approaches.

The ECB's Villeroy de Galhau, speaking in Tokyo just now, said the EU is ready in case of a

no-deal Brexit which would be "very detrimental" for the British economy but have a "limited"

effect on European GDP.

"Politics will remain high on the market’s agenda this coming week," write Societe Generale (Swiss: 519928.SW - news)

analysts. "There is also the Eurogroup meeting today and Italian politics is never usually far

from the news."

The Eurogroup meeting is dedicated to euro area reform in preparation for the December

Summit, and topics on the agenda include reform of the European Stability Mechanism, the

European Deposit Insurance Scheme, and the euro area stabilisation tool.

(Helen Reid)

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MORNING CALL: DRIFTING HIGHER AMID TRADE WAR PRESSURES (0629 GMT)

European stocks are seen inching up this morning after an eventful weekend with a summit of

Asia-Pacific leaders in Papua New Guinea failing to agree on a communique for the first time in

their history due to deep divisions between the U.S. and China over trade.

Share (LSE: SHRE.L - news) markets turned mixed in Asia on Monday amid conflicting signals on the prospects for a

truce in the Sino (Dusseldorf: 1205802.DU - news) -U.S. trade dispute, while the Federal Reserve's newly-found concerns over the

global economy constrained the dollar.

Sino-U.S. tensions were clearly on display at an APEC meeting in Papua New Guinea over the

weekend, where leaders failed to agree on a communique for the first time ever.

U.S. Vice President Mike Pence said in a blunt speech that there would be no end to U.S.

tariffs on $250 billion of Chinese goods until China changed its ways.

According to CMC Markets (LSE: CMCX.L - news) , the FTSE 100 is expected to open 2 points higher at 7,015, the DAX

is seen opening 4 points higher at 11,345, and the CAC 40 is expected to open 6 points higher at

5,031.

(Helen Reid)

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(Reporting by Helen Reid, Danilo Masoni, Julien Ponthus)